GBP/ZAR Exchange Rate Edges Higher Despite South Africa Resuming Johnson & Johnson Covid-19 Vaccine Rollout
The Pound South African Rand (GBP/ZAR) exchange rate rose by 0.8% as cautious markets have limited the appeal of the risk-sensitive ZAR. The pairing is currently trading around R20.00.
The risk-sensitive South African Rand suffered today as concerns continue to grow over India’s and Japan’s rising Covid-19 infections.
As a result, this has limited the appeal of the South African Rand which is largely correlated to global economic mood.
However, some ZAR traders are becoming more optimistic about South Africa’s economy now that the nation has resumed its Johnson & Johnson vaccine rollout.
South Africa’s health ministry said on Monday:
‘It has since been established there is a one in a million chance of getting the clot after the vaccine and that it appears that women between the ages of 18 and 48 years old are particularly at risk.
‘With such a low probability of developing a clot, all the regulators across the world have recommended the continued use of Johnson and Johnson.’
In the absence of any notable South African economic data today, ZAR traders are becoming increasingly concerned about the outlook for the nation’s economy.
Pound (GBP) Exchange Rate Rises as UK Economic Optimism Continues to Grow
The Pound (GBP) rose today as confidence in the UK economy continues to grow as the nation’s Covid-19 infections remains relatively low compared to the beginning of the year.
The UK economy is now predicted to grow at its fastest rate since the Second World Ward, according to the EY Item Club.
Today also saw reports that UK shopping trips will further fuel the UK’s economic rebound this year.
Ian Stewart, the chief economist at Deloitte, commented:
‘The UK is primed for a sharp snapback in consumer activity. High levels of saving, the successful vaccination rollout and the easing of the lockdown set the stage for a surge in spending over the coming months.’
HSBC has also reported stronger-than-expected profits as the UK economy continues to recover as lockdown restrictions are eased.
The bank said that its profits had risen because of an ‘an improvement in the economic outlook, notably in the UK.’
As a result, the GBP/ZAR exchange rate has benefited from an increasingly rosy outlook for the British economy in the months and years ahead.
Pound South African Rand (GBP/ZAR) Exchange Rate Forecast: Could an Improving Outlook for the UK Economy Further Buoy Sterling?
South African Rand (ZAR) investors will be looking ahead to Thursday’s publication of the South African Producer Price Index for March.
Any signs of improvement in the South African economy would prove ZAR-positive.
The Pound South African Rand (GBP/ZAR) will likely head higher this week, however, as the outlook for the UK economy continues to improve.